Q 19- This assessment requires you to apply critical thinking and to showcase your learning in terms of theoretical /conceptual application. Your question, see below, relates to the topic/s of “Economics - Market Structure”. Also, you are required to integrate other applicable topics chosen from chapters 1-8 in order to further justify your critical analyses. Your written reply should be between 600-700 words. Does the entry of Aldi into the Australian supermarket industry change the market structure of the industry substantially? Provide clear explanation in support of your answer R. Aldi’s entry into the market would cause an immediate threat on market’s stability with few key dominant competitors including Coles and Woolworths …show more content…
This unexpected shift in market structure will offer consumers a new, more cost effective alternative to what is currently on offer. This change in consumer preference may results in a demand curve shift to the right causing competitor’s sales to decline and possibly drive demand for high end expensive brands down across the market. This shift in demand could open up opportunity for demand to increase on lower priced and no name products which Aldi specialise in supplying. A scenarios such as this could potentially cause an upward trend in supply curve, ultimately driving a bigger need for Aldi to increase supply of products positioned at a lower price point and the need for more store availability to meet the demand. Lower production costs would allow for Aldi to gain a larger portion of competitor market share which would increase demand in goods resulting in a higher sales return therefore we would see rapid shifts in the supply curve in an outward …show more content…
catalogue promotions. These are some of the factors enabling low priced products providing many points of difference over competitors. Aldi’s approach circumnavigated many of the usual barriers to entry into this extremely competitive oligopoly. An example of an existing barrier within this market is the agreements between both Coles and Woolworths with shopping centre organisations including Westfield to have equal prime positioning and exclusivity to have stores within these prime centre locations. Aldi have considered this barrier of entry and looked at how they could work it to their advantage to differentiate themselves from the other two major retailers. The decision taken by Aldi’s to ease its entry into the market included strategies to decrease start-up costs such as selection of more regional store locations and lower rent options by situating stores outside of the usual high demand shop fronts within large
They anticipate competition between supermarket chains will be fierce this year as food prices continue to stay low. The Canadian grocers have been grappling with declining food prices, especially for meat, and Loblaw’s said “The notion of a shift into a steady inflationary environment is going to be offset by what we see as a continued level of competitive intensity”
The food market business is usually a difficult one, but online retailer Amazon's proceeding to purchase high-end chain Whole Foods changed the landscape. The new corporation is currently reducing prices, as well as Amazon is managing to reduce costs by taking its online expertise
In today’s world, to save as much money as possible is very important to many people. Grocery shopping is probably the time many people spend most of their paycheck. People will flock to Wal-Mart to take advantage of the low prices. However, another store also offers low prices, and almost consistently more than Wal-Mart does. The store’s name is Aldi, and it is a great store for those customers who are in a rush, and want to save money
Because there are many grocery stores that carry similar products that ALDI carries it makes the force strong. However ALDI has a different approach to their daily operation that no other company does.
In order to fully understand the island of Tap’s market for corn, the broad term market structure must be defined. Market structure exists as the makeup of companies operating in a specific market. The two basic types of structures remain as perfectly competitive markets and monopoly markets. These exist as the two most basic and opposite forms of market structure, many other forms exist in between these two. Applying these two forms of structure to the corn market in Tap, results in different outcomes of both quantity of corn produced and price at which corn sells. The examination and application to Tap’s corn market will correspond with the two forms.
Market structure is classified according to the degree of competition firms encounter in their industry (Baker College, 2016). There are four main market structures: pure competition, monopolistic competition, oligopoly and a pure monopoly. Pure competition is where fir...
Whole Food’s has investments in marketable securities that are categorized as short- term or long-term securities.
What competitive pressures must Oliver’s Market be prepared to deal with? What do we learn about the nature and strength of the competitive pressures Oliver’s faces from doing five-forces analysis of competition? Which of the five competitive forces is the strongest?
Aldi became the German chain of the lowest price of the great challenge.• The Coles brand is recognized as one of Australia's largest leaders, with 80% of the market making Woolworths a strong competitor.• Coles has 100,000 employees and has more than 700 stores nationwide.• Cole's first supermarket opened in Melbourne in 1960.• In 2010, Coles created another slogan "down down, price down down" to think at a low price to achieve leadership. Woolworths• Woolworths is a supermarket brand in Australia with more than 870 stores.• Woolworths and Coles have a market share of nearly 80%, but Aldi has been challenged by leadership.• The brand has been winning the prestige and hobbies of the market, with the customer named "woollies"•
In the Grocery industry today there are 4 major companies that dominate the United States market share; Kroger, Safeway, Super value and Publix. With the competitive advantage of being the largest stores in the industry these retail giants should have competition at a minimum and should be thriving (Farfan, US Largest Retail Supermarkets - Complete List). The application of Porter’s Five Forces that influence an industry shows that these retailers do have many advantages but being vulnerable in even one of the areas can make a significant difference in market share and profitability.
The food and staples retailing is an increasingly competitive industry. The market giants (competitors) are Coles (owned by Wesfarmers) which has 741 stores across Australia and plans to add 70 m...
At present they Coles are regularly checking 8000 product to ensure that they remain in the lowest possible price. At the same time, Wesfarmers must come out with a different segment of own individualistic product lines where they will focus on lowest profit margin. The segment can’t be big at first. But within 10 years, they can have a reasonably strong product line consisting of 1000-2000 products. Remembering the huge market capital they have, it is not a big problem. For any foreign competitors like Aldi, it is difficult to adopt local culture completely. Wesfarmers in that case have a big advantage. Supermarkets must contain products based on the region they operate and local mangers and employee must have some freedom regarding selection of these products. At the same time, they can look out for product of local entrepreneurs representing local culture and it can increase revenue. At the same time, that will be very effective as a patriotic campaign and the image developed by such step will help to further enhance its position as the no 1 conglomerate in
Big rivals such as Tesco and Morrisons started to compete in price by shrinking packages, introducing cheaper equivalent products, or using cheaper ingredients. Although these strategies cause a sluggish revenue increase, it works on boosting sales and market shares. For example, Tesco’s sale grew by 2.2 percent during July to September. Apart from the traditional retailers, Aldi who applies a similar discounter model is also a strong competitor. In 16th July, the market share of Aldi was 6.2% while Lidl occupied 4.6% of the market (Gale,2016) Compared to Lidl, Aldi has a more dominant market position and better corporate with local farmers. To stand out from these rivals, Lidl still has a long way to go.
[Online] Retail-week.com. Available at: http://www.retail-week.com/sectors/food/analysis-is-asdas-five-year-strategy-the-right-one/5054989.article [Accessed 23 Jan.
The 4 market structures in relation to the benefits and costs to the consumer and producer